`_____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________________
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`
`
`AMNEAL PHARMACEUTICALS LLC and
`PAR PHARMACEUTICAL, INC.
`Petitioners
`
`v.
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`JAZZ PHARMACEUTICALS, INC.
`Patent Owner
`
`
`
`_____________________
`
`Case: IPR2015-00547 (7,765,107)
`_____________________
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`PETITIONERS’ REPLY REGARDING THE IDENTIFICATION OF REAL
`PARTIES IN INTEREST
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`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`TABLE OF CONTENTS
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`IPR2015-00547
` Patent No. 7,765,107
`
`I.
`INTRODUCTION ........................................................................................... 1
`LEGAL STANDARD ..................................................................................... 1
`II.
`FACTUAL BACKGROUND .......................................................................... 2
`III.
`IV. THE PETITIONS CORRECTLY IDENTIFY PAR INC. AS THE
`REAL PARTY IN INTEREST. ....................................................................... 3
`A. None of the Par Parents Have a Tangible Interest in the
`Petitions. ................................................................................................. 4
`Par Inc. Has Exercised Sole Direction and Control Over the
`Petitions. ................................................................................................. 5
`1.
`The Board Has Found the Type of Evidence Jazz
`Presents Here Insufficient to Confer RPI Status on a
`Non-party. ................................................................................... 5
`Prior Board Decisions Finding Non-Party Parent
`Companies To Be RPIs Are Distinct From the Present
`Case. ............................................................................................ 8
`CONCLUSION .............................................................................................. 10
`
`B.
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`2.
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`V.
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`-i-
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`IPR2015-00547
` Patent No. 7,765,107
`
`I.
`
`INTRODUCTION
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`Pursuant to the Board’s Order on May 12, 2015 (Paper 11), Petitioner Par
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`Pharmaceutical, Inc. (“Par Inc.”) hereby responds to Jazz Pharmaceuticals, Inc.’s
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`(“Jazz”) assertion that the above-captioned petition for inter partes review failed to
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`name Par Inc.’s direct and indirect parent holding companies as “real parties-in-
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`interest” (“RPI”). The Board should reject Jazz’s arguments as they fail to establish
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`that Par Inc.’s parent holding companies have an interest in or control over this
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`proceeding sufficient to render them RPIs.
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`II. LEGAL STANDARD
`The patent owner challenging a Petitioner’s RPI disclosure must provide
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`sufficient evidence to show the disclosure is inadequate. Intellectual Ventures
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`Mgmt, LLC v. Xilinx, Inc., IPR2012-00018, Paper 12, at 3 (P.T.A.B. Jan. 24, 2013).
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`The RPI is “the party that desires review of the patent”—that is, the party “at
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`whose behest the petition has been filed.” Office Patent Trial Practice Guide, 77
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`Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (to be codified at 37 C.F.R. Pt. 42). The
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`RPI requirement exists to ensure that a non-party is not “litigating through a
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`proxy.” See Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc., IPR2014-01288,
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`Paper 13, at 12 (P.T.A.B. Feb. 20, 2015). Moreover, the RPI analysis is a narrowly
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`tailored inquiry into the “relationship between a party and a proceeding;” not “the
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`relationship between parties.” Id. at 11.
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`
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`-1-
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`IPR2015-00547
` Patent No. 7,765,107
`The mere existence of a parent-subsidiary relationship “does not establish a
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`relationship sufficient to make the parent a real party in interest.” TRW Automotive
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`U.S. LLC v. Magna Elec. Inc., IPR2014-01499, Paper 7 at 11 (P.T.A.B. Mar. 19,
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`2015). Instead, Patent Owner must sufficiently demonstrate with evidence that the
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`parent controls a subsidiary’s participation in the inter partes review. Compass
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`Bank v. Intellectual Ventures II, IPR2014-00719, Paper 11 at 8 (P.T.A.B. Oct. 24,
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`2014).
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`III. FACTUAL BACKGROUND
`Par Inc. is the wholly-owned subsidiary of a series of holding companies,
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`including Par Pharmaceutical Companies, Inc. (“Par Co.”); Sky Growth
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`Intermediate Holdings II, Inc. (“SGIH II”); Sky Growth Intermediate Holdings I,
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`Inc. (“SGIH I”); and Par Pharmaceutical Holdings, Inc. (“Par Holdings”)
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`(collectively, the “Par Parents”). (AMN1039, ¶2.) Par Inc. is engaged in the
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`business of making, selling and distributing pharmaceuticals; the Par Parents,
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`however, do not conduct any such operations. (Id., ¶¶2–4.)
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`Par Inc. prepared and filed ANDA No. 205403 (“Par’s ANDA”) with the
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`United States Food and Drug Administration, directed to a 500 mg/ml solution of
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`sodium oxybate (“Par’s ANDA Product”), and holds all right and title to that
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`ANDA (Id., ¶5). Par’s ANDA includes “Paragraph IV” certifications that U.S.
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`Patent Nos. 7,668,730; 7,765,106; 7,765,107; 7,895,059; 8,457,988; and 8,589,182
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`-2-
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`IPR2015-00547
` Patent No. 7,765,107
`(collectively, “the Petition Patents”) are invalid or would not be infringed by Par’s
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`ANDA Product. Based on that ANDA filing, Jazz sued Par Inc.—and, after nearly
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`eighteen months of litigation, has yet to sue any of the Par Parents—for
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`infringement of the Petition Patents, among others and seeking a declaration that
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`Par’s ANDA Product would infringe them upon FDA approval of Par’s ANDA
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`(See AMN1038 at 16–23).
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`IV. THE PETITIONS CORRECTLY IDENTIFY PAR INC. AS THE
`REAL PARTY IN INTEREST.
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`Far from being a “nominal plaintiff” with “no substantial interest,” Par Inc.
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`is the only Par entity with a cognizable interest in these Petitions, and is the only
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`Par entity that has maintained any control over their preparation and filing.1 Jazz
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`has failed to offer credible evidence that Par Inc. is acting as a proxy for the Par
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`Parents, or that the Par Parents control these Petitions so as to render them RPIs.2
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`1 Amneal Pharmaceuticals LLC, of course, is also an RPI with respect to IPR2015-
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`00545, -00546, -00547, and -00554.
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`2 Notably, Jazz named Jazz Pharmaceuticals, Inc. as the sole RPI in its Mandatory
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`Notices, (see Paper 8 at 1) despite Jazz being a wholly-owned subsidiary of Jazz
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`Pharmaceuticals PLC, which could presumably control or direct its behavior in
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`these proceedings as well for the same reasons. (See AMN1037 at 29 and Exhibit
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`21.1.) In other words, even Jazz apparently does not believe that a parent-
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`-3-
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`IPR2015-00547
` Patent No. 7,765,107
`A. None of the Par Parents Have a Tangible Interest in the Petitions.
`Whether the Par Parents are RPIs depends on the relationship between them
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`and these inter partes review proceedings, not their relationship to Par Inc. See
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`Aruze Gaming, IPR2014-01288, Paper 13 at 12 . Fundamental to that inquiry is the
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`non-party’s interest in the proceeding, and whether it has an opportunity to control
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`that proceeding to see that interest carried out. See Office Patent Trial Practice
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`Guide, 77 Fed. Reg. at 48,759 (“[A]t a general level, the ‘real-party-in-interest’ is
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`the party that desires review of the patent.”) Jazz would turn that inquiry on its
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`head: Jazz would have the Board conclude the Par Parents are RPIs solely from
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`their ability to control Par Inc., without showing that they have in fact exercised
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`control or what the Par Parents’ interest is.
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`Par Inc., on the other hand, prepared, filed, and owns its ANDA.
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`(AMN1039, ¶5.) After eighteen months of litigation, Jazz has only sued Par Inc.,
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`and none of the Par Parents, for infringement. (Id., ¶6; see also AMN1038.) Par
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`Inc. is the only Par entity that directed, controlled, and funded the preparation and
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`filing of these Petitions. (Id., ¶6.) If the Petitions are ultimately successful, Par Inc.
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`will have cleared one obstacle towards approval of its ANDA. The Par Parents,
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`however, have no interest in seeking review of the Petition Patents. (AMN1039,
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`¶8). Thus, other than those for which Amneal Pharmaceuticals LLC is a Petitioner,
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`subsidiary relationship alone is enough to make a corporate parent an RPI.
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`-4-
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`IPR2015-00547
` Patent No. 7,765,107
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`Par Inc. is the sole RPI for these Petitions.
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`B.
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`Par Inc. Has Exercised Sole Direction and Control Over the
`Petitions.
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`Because Jazz cannot demonstrate that the Par Parents have an actual,
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`cognizable interest in these proceedings, Jazz’s argument is reduced to a series of
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`superficial observations regarding the corporate ownership of Par Inc., rather than
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`an actual showing that the Par Parents had the opportunity or relevant reason to
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`direct or control the instant proceedings.
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`1.
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`The Board Has Found the Type of Evidence Jazz Presents
`Here Insufficient to Confer RPI Status on a Non-party.
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`Jazz claims that Par Inc. and the Par Parents “hold themselves out as a single
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`unit,” relying heavily on public financial documents that include collective
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`references to Par Inc. and the Par Parents through words such as “we,” “our,” and
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`“the Company” Paper 10 at 13. But using these generic descriptors in such
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`documents is commonplace. The Board has rejected attempts to base RPI status on
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`such “generic references to the existence of a parent/subsidiary relationship in SEC
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`documents.” TRW Auto., IPR2014-01499, Paper 7 at 11. The Board has similarly
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`declined to parse the semantics of public statements for evidence of a non-party
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`RPI. See id. at 9, 11 (finding use of “the Company” in press releases insufficient).
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`That Par Inc. and the Par Parents operate a single website also is irrelevant.
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`First, the Board has previously held that a shared website between sister companies
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`-5-
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`IPR2015-00547
` Patent No. 7,765,107
`did not make the non-party an RPI. See Aruze Gaming, IPR2014-01288, Paper 13
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`at 17-18. Second, none of the Par Parents conduct any operations; Par Inc. is the
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`Par entity that manufactures, sells, and distributes drugs. (AMN1039 at ¶¶3–4).
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`That Par Inc. is a subsidiary to the Par Parents makes it no different than the
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`situation in Aruze; Jazz attempts to elevate form over substance and says nothing
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`regarding the Par Parents’ relationship to these Petitions.
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`Jazz further asserts that Par Inc. and the Par Parents “act as a single unit”
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`and “are controlled by a single master,” Paper 10 at 13. But, even if true, the Board
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`has found such parent/subsidiary relationships inadequate to show “sufficient
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`opportunities to control all aspects of Petitioner’s business, including controlling
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`this inter partes review,” for purposes of establishing a parent corporation as an
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`RPI. TRW Auto., IPR2014-01499, Paper 7 at 9 (quotation marks omitted).
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`Similarly, that Par Inc. shares corporate officers with the Par Parents does not
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`mean the Par Parents control Par Inc. in this proceeding, or have the ability to do
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`so. See Butamax Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00215, Paper 47,
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`at 6 (P.T.A.B. Sept. 23, 2014) (finding that Board membership of two directors in
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`both parent and subsidiary insufficient to make the parent an RPI).
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`More fundamentally, however, Jazz misses the mark because it aims for the
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`wrong target: “RPI does not describe the relationship between parties” but the
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`“relationship between a party and a proceeding.” Aruze Gaming, IPR2014-01288,
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`-6-
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`IPR2015-00547
` Patent No. 7,765,107
`Paper 13 at 11. Par Inc. was the sole party responsible for directing, controlling,
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`and funding the preparation and filing of the Petitions. (AMN1039, ¶7.) None of
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`the Par Parents participated in the decision to file the Petitions, nor did they
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`exercise any control over the filing or content of the Petitions, nor did they provide
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`funding or other compensation for the preparation and filing of the Petitions. (Id.)
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`The Petitions were not discussed at any of the Par Parents’ board meetings. (Id.)
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`The opportunity for control was simply not present.
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`Yet Jazz points to public statements by two of Par Inc.’s parent companies
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`referring to the related district court litigation as “our legal proceedings.” Paper 10
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`at 19. But simply because Par Holdings and Par Co. refer to themselves and their
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`wholly-owned subsidiary in the first-person plural is hardly “telling” 3 that Par
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`Holdings and Par Co. intend to defend against Jazz’s enforcement of its patents in
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`light of the fact that—after eighteen months of litigation—Jazz has not named the
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`Par Parents as defendants, nor have the Par Parents intervened in those litigations
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`or filed declaratory judgments on any of the Petition Patents. (AMN1039, ¶8.)
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`3 Likewise, Jazz’s latest 10-K states “[i]n this report, unless otherwise indicated or
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`the context otherwise requires, all references to ‘Jazz Pharmaceuticals,’ ‘the
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`registrant,’ ‘we,’ ‘us,’ and ‘our’ refer to Jazz Pharmaceuticals plc and its
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`consolidated subsidiaries.” (see AMN1037 at 3), despite the fact that Jazz never
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`named Jazz Pharmaceuticals plc as an RPI.
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`-7-
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`IPR2015-00547
` Patent No. 7,765,107
`Second, Jazz relies on the LinkedIn page of David Silverstein—the attorney
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`who signed the power-of-attorney for the instant petitions—to show he is
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`employed by Par Co. But, in fact, David Silverstein is, in fact, employed on behalf
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`of Par Inc. (id., ¶7) and signed the Power of Attorney on Par Inc.’s behalf. (See
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`Paper 2). And while Jazz cites two pleadings showing Par Inc.’s outside counsel
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`are also litigation counsel for Par Co. in unrelated proceedings, using common
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`litigation counsel hardly makes a non-party an RPI. See Aruze Gaming, IPR2014-
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`01288, Paper 13 at 19. Thus, Jazz offers no credible evidence of a relationship
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`between the Par Parents and these Petitions—much less control over them.
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`2.
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`Prior Board Decisions Finding Non-Party Parent
`Companies To Be RPIs Are Distinct From the Present Case.
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`The Board has previously found a petitioner’s parent corporation to be an
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`RPI in certain proceedings where “the parent corporation ‘has had control, or could
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`have controlled the petitioner, in all aspects of its business,’ which would include
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`… the inter partes review.” TRW Auto., IPR2014-01499, Paper 7 at 10 (quoting
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`Zoll Lifecor Corp. v. Philips Elecs. N. Am. Corp., IPR2013-00609, Paper 15 at 12
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`(P.T.A.B. Mar. 20, 2014)). But each of those cases involved a situation where a
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`Petitioner’s parent stood to gain or lose financially from an underlying patent
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`infringement suit. See Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
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`IPR2013-00453, Paper 88, at 3 (P.T.A.B. Jan 6, 2015); Zoll, IPR2013-00609,
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`Paper 15 at 11-12; Galderma S.A. v. Allergan Industrie, IPR2014-01422, Paper 14
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`-8-
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`IPR2015-00547
` Patent No. 7,765,107
`at 12-13 (P.T.A.B. Mar. 5, 2015). That situation is not present here: the Par Parents
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`have no direct interest in these proceedings. (AMN1039, ¶8.)
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`Moreover, in those cases, the Petitioner’s parent showed a greater degree of
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`control over the subject matter of the Petitions than can be shown here. In Zoll, the
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`Patent Owner provided evidence showing “unified actions by Petitioner and
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`[parent company] in [a] ‘multi-state patent war’ … with Patent Owner,” and
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`highlighting
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`that
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`the non-party parent’s management
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`team—rather
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`than
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`petitioner’s—participated in a court-ordered mediation in a related proceeding.
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`Zoll, IPR2013-00609, Paper 15 at 12. Similarly, in Atlanta Gas, the crucial finding
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`was that officers for the parent engaged in related negotiations on behalf of both
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`the Petitioner and its parent regarding triggering indemnity provisions in
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`connection with the patent litigation. IPR2013-00453, Paper 88 at 9-10. In
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`Galderma, the Board found “historical evidence for a pattern of control” of the
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`parent over the subsidiary with respect to the specific products at issue in a parallel
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`patent suit. See IPR2014-01422, Paper 14, at 11-12 (while also noting “the
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`existence of a parent-subsidiary relationship alone” is insufficient to show RPI
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`status. Id. at 12).
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`None of these facts are present here. Rather, Jazz relies on allegations that
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`the “same corporate officers… control the decision making for all of the Par
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`companies as a whole,” Paper 10 at 16, without evidence that those corporate
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`these Petitions orr the litigaation in theeir role as officers ffor the Parr Parents.
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`d or controolled
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`Jazz
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`officers directed oor controlleed these Peetitions or
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`IPPR2015-000547
` Patent
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`No. 7,7655,107
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`the litigatiion. And Jaazz has offfered
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`no basiss to concluude that theese corporaate officerss would haave directe
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`alleges
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`nothing mmore than
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`the existennce of parrent holdinng compannies abovee Par
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`Inc., whhich is insuufficient to warrant a judgment
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`that the Paar Parents
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`are RPIs.
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`V. CCONCLUSSION
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`TThe evidence shows PPar Inc. is
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`the only PPar entity tthat has funnded, direccted,
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`or contrrolled thesee inter parrtes reviewws. Jazz’s c
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`laims amoount to nothhing more
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`generic
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`referencess to a tradiitional parent-subsiddiary relatioonship. Paar Inc. has
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`fully saatisfied thee requiremments of §
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`312(a) annd the Bo
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`ard shouldd maintainn the
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`than
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`thus
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`current Petition filling dates aand instituute review oof the Petittion Patentts.
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`Date: MMay 26, 2015
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`1100 Neew York AAve, NW
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`Washinngton, DC 220005
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`(202) 3771-2600
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`Respeectfully Subbmitted,
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`STERNNE, KESSLEER, GOLDSTTEIN & FOXX P.L.L.C.
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`Denniies Varughhese
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`Registtration No.. 61,868
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`
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`Lead AAttorney fofor Petitionners
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`-10-
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`CERTTIFICATIION OF SSERVICE
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`IPPR2015-000547
` Patent
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`No. 7,7655,107
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`(37 C.F.RR. §§ 42.6((e))
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`TThe underssigned herreby certifies that
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`the abovee-captionedd “Petitionners’
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`Reply
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`Regardingg the Idenntification
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`Of Reall-Parties-inn-Interest”
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`includingg its
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`support
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`ing evidennce (EXHIIBITS AMMN1037-10039), was
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`served in
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`its entiretyy on
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`May 266, 2015, upon the following partties via eleectronic maail:
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`QUINNN EMANUELL URQUHART &
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`
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`F. Domminic Cerrrito
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`SULLIVVAN LLP
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`
`51 Maadison Aveenue
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`22nd FFloor
`10010
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`New YYork, NY
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`
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`nickceerrito@quiinnemanueel.com
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`John VV. Biernaccki
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`
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`JONESS DAY
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`Northh Point
`venue
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`901 LLakeside Av
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`Cleveeland, OH 444114
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`jvbiernrnacki@jonnesday.comm
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`
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`Date:
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`May 26, 2015
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`1100 NNew York
`Ave, NW
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`Washiington, DCC 20005
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`(202) 371-2600
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`
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`Respecttfully Submmitted,
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`STERNEE, KESSLERR, GOLDSTEEIN & FOX PP.L.L.C.
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`Denniess Varughesse
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`Registraation No. 661,868
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`Lead Atttorney forr Petitionerrs